Internal Controls

承認：エディタ

Our company's basic policy for the establishment of an internal control system is as follows, and we are developing the system in accordance with this concept.

Structure to ensure that the execution of duties by directors and employees of our company and our subsidiaries (hereinafter referred to as “our group”) complies with laws and regulations and the Articles of Incorporation.

Establish a Compliance Code of Conduct to ensure compliance.
The Risk Management Committee, chaired by the Vice Chairman and Representative Director and composed of the executive directors of our company, is the highest deliberative body for risk management, including compliance, of our group, the committee will work as a group to address a wide range of corporate risks, including but not limited to compliance with all applicable laws and regulations.

Under the control of the Risk Management Committee, the Business Laws and Regulations Committee, the General Laws and Regulations/Management Environment Committee, the Business Operations Committee, and the Crisis Response Committee shall be established as subcommittees.
The chairperson of each affiliated committee shall be selected from our company's executive directors or executive officers, and a member of the secretariat of each affiliated committee shall be appointed from the managers in charge of the relevant departments to manage the corporate risks assigned to each affiliated committee.
The Audit Department shall utilize the reports from the Risk Management Committee and each of the affiliated committees regarding compliance of our group when conducting internal audits.
Internal audit activities shall be reported regularly to the board of directors and the board of Audit & Supervisory Board Member.
Our company shall establish a whistle-blowing system in accordance with the Whistleblower Protection Regulations for the purpose of early detection and correction of misconduct, thereby contributing to the reinforcement of compliance management by establishing a mechanism for the proper handling of consultations and reports from our group's employees and others concerning organizational or individual violations of laws and regulations, etc.

Structure for the storage and management of information related to the execution of duties by our company's board of directors

The Information Management Regulations shall be established for the purpose of preventing the leakage of important information within our company and the unauthorized introduction of important information outside our company, thereby contributing to the development of our company's business.
In accordance with the document management rules, information related to the execution of duties by the board of directors shall be recorded in documents or electromagnetic recording media (hereinafter referred to as “documents, etc.”) and stored.
Directors and Audit & Supervisory Board Members shall have access to these documents, etc. at all times.

Regulations and other structures for managing the risk of loss of our group

For all corporate risks, a risk management structure, including the establishment of a Risk Management Committee, shall be established and implemented.
Each division of our group, based on the segregation of duties, shall be in charge of monitoring and responding to day-to-day risks including disasters, quality, systems, information security, daily business operations, and vehicle operation management, etc., including the establishment of rules and manuals and the implementation of training programs.
The status of such day-to-day risks shall be reported to the Risk Management Committee on a regular basis.
The Risk Management Committee and its subcommittees support the above activities by our group's divisions and are responsible for monitoring and responding to cross-organizational and unforeseen risks that may have a significant impact on our company's activities.
The Audit Department shall utilize the reports from the Risk Management Committee and each of the affiliated committees regarding the status of risk management of our company group when conducting internal audits.
Internal audit activities shall be reported regularly to the board of directors and the board of Audit & Supervisory Board Members.
The Risk Management Committee shall report regularly to the board of directors on important matters concerning the status of risk management of our group as a whole.

Structure to ensure the efficient execution of duties by the directors of our company's group

The Board of Executive Officers, consisting of directors and executive officers, shall be established to discuss and deliberate on our group's basic strategies, business plans, various policies, and individual issues that may have a significant impact on the management of the group.
All of our group shall establish and disseminate shared goals, and the executive directors shall establish specific goals to be implemented by each department to achieve these goals and efficient methods of achieving them, and the results shall be promptly converted into data using an IT-based system.
The board of directors shall periodically review the results of these reviews and encourage improvements, such as eliminating or reducing factors that impede efficiency, thereby increasing the certainty of achieving the goals and establishing a system to achieve company-wide operational efficiency.

Structure to ensure the appropriateness of operations of the corporate group consisting of our company, the parent company, and our subsidiaries

Our company shall establish a regular meeting body with the parent company to share information so that our company can maximize its role within the parent company's corporate group, while maintaining management independence from the parent company.
With the aim of establishing internal controls within our group, the Corporate Planning Department shall be positioned as the department in charge of internal controls for our subsidiaries, and a system shall be established that includes an efficient system for discussion, information sharing, and communication of instructions and requests concerning internal controls among our company and group companies.
Our company's board of directors, department heads, and the presidents of our group companies shall have the authority and responsibility for establishing and operating internal controls to ensure the appropriateness of each department's business execution.
The internal audit examines and evaluates our company group's overall management and operational systems and business execution from the perspective of legality and reasonableness, the purpose is to preserve our company group's assets and improve its management efficiency by providing information based on the results of the audit, as well as advice and proposals for improvement and rationalization, thereby contributing to the development of our company's business.

Structure for reporting to our company of matters related to the performance of duties by directors, employees, etc. of our company's subsidiaries

Our company shall require our company's subsidiaries to report regularly to our company regarding their operating results, financial condition, and other important information.

Matters concerning employees who are requested by Audit & Supervisory Board Members to assist them in their duties

Audit & Supervisory Board Members may order the staff of the Audit Department and other departments to assist them in their duties as necessary for audit work.

Matters concerning the independence from directors of employees who are assigned to assist the duties of Audit & Supervisory Board Members, and matters related to ensuring the effectiveness of instructions given to employees and their supervisors.

Employees who are to assist Audit & Supervisory Board Members in the performance of their duties shall not be subject to the direction and orders of the directors or the general manager of their department when performing such duties, but shall be subject to the direction and orders of Audit & Supervisory Board Members on a priority basis.

Structure for reporting to Audit & Supervisory Board Members by our company's directors and employees, and other Systems for Reporting to Corporate Auditors

Directors or employees shall promptly report to the Board of Audit & Supervisory Board Members, in addition to legally required matters, matters that may have a material impact on our company group, the status of internal audits, and the status of reporting through the internal reporting system and the details thereof.
Audit & Supervisory Board Members shall attend the following important internal meetings and receive reports on management information and various other information.

Structure for reporting to our company's Audit & Supervisory Board Members by directors, Audit & Supervisory Board Members, and employees of our company's subsidiaries, or by persons who receive reports from them.

When requested by our company's Audit & Supervisory Board Members to report on matters concerning the execution of business operations, our group's officers and employees shall promptly make appropriate reports.

Structure to ensure that a person who makes a report to our company's Audit & Supervisory Board Members will not be subjected to any disadvantageous treatment because of such report.

Our company shall prohibit any disadvantageous treatment of any officer or employee of our group who makes a report to our company's Audit & Supervisory Board Members on the grounds that he/she has made such a report, and shall ensure that all officers and employees of our group are informed to that effect.

Procedures for prepayment or reimbursement of expenses incurred in the performance of duties by Audit & Supervisory Board Members, and matters concerning the policy for handling other expenses or liabilities incurred in the execution of duties

When an Audit & Supervisory Board Member makes a request to our company for prepayment of expenses, etc., in accordance with Article 388 of the Companies Act, for the performance of his/her duties, our company shall, after deliberation by the department in charge, bear the expenses, except when the expenses or liabilities in connection with such request are not necessary for the performance of the Audit & Supervisory Board Members’ duties.

Other systems to ensure that audits by Audit & Supervisory Board Members are conducted effectively

Audit & Supervisory Board Members shall establish auditing standards for corporate auditors in order to accurately grasp the actual situation from a fair and objective viewpoint, ensure thorough compliance in order to prevent misconduct and other risks from occurring and enhance the crisis response system, pay attention to the sound management and development of our company group and the enhancement of social trust, and thereby meet the trust of shareholders and the demands of society.
The Representative Directors shall meet regularly with the Board of Directors to exchange opinions on issues to be addressed by the Company, risks surrounding the Company, the state of the environment for audits by the Corporate Auditors, and important issues related to the audits.

Structure to Ensure Reliability and Adequacy of Financial Reporting

In accordance with the provisions of the Financial Instruments and Exchange Act, our company and our group companies shall continuously develop, operate, and evaluate a system for effective and appropriate internal control over financial reporting to ensure the reliability and appropriateness of financial reporting.